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National Security Consequences of U.S. Oil Dependency, a report by the Council
on Foreign Relations Independent Task Force on
Energy, concludes that the “lack of sustained attention
to energy issues is undercutting U.S. foreign policy and
U.S. national security.” The report goes on to examine
how America’s dependence on imported oil—which
currently comprises 60 percent of consumption—
increasingly puts it into competition with other energy
importers, notably the rapidly growing economies of China and India.

The task force was chaired jointly by James R. Schlesinger, a former secretary
of defense and secretary of energy, and John Deutch, former director of Central
Intelligence and undersecretary of energy, and drew from industry, academia, government,
and NGOs. PESD Director David Victor directed the task force and FSI senior fellow by courtesy James Sweeney, director of Stanford’s
new Precourt Institute for Energy Efficiency, served as a member.

The task force unanimously concluded that incentives are needed to slow
and eventually reverse the growth in petroleum consumption, particularly in the
transportation sector, but was unable to agree on which specific incentives—such
as gasoline tax-funded energy technology R&D, more stringent and broadly applied
Corporate Average Fuel Efficiency (CAFE) standards, and a cap-and-trade permit
system for gasoline—would most effectively achieve this result.

The task force report included additional recommendations regarding
the supply and consumption of energy including the following:

Encourage oil supply from all sources

Promote better management and governance of oil revenues

Remove the protectionist tariff on imported ethanol

Increase the efficiency of oil and gas consumption in the United States and elsewhere

Switch from oil-derived products to alternatives such as biofuels

Make the oil and gas infrastructure more efficient and secure

Increase investment in energy technology R&D

Promote the proper functioning and efficiency of energy markets

Revitalize international institutions such as the International Energy Agency (IEA)

The report stressed that the U.S. government must reorganize to integrate energy
issues with foreign policy to address the threats to national security created by energy
dependence. The task force offered a number of recommendations to better promote
energy issues in foreign policy deliberations as follows:

Establish an energy security directorate at the National Security Council to lead an
interagency process to influence the discussion and thinking of the NSC principals

Fully inform and engage the secretary of energy on all foreign policy matters with
an important energy aspect

Include energy security issues in the terms of reference of all planning studies at
the NSC, Defense, State, and the intelligence community

The task force restricted its inquiry to the challenges of managing U.S. and global
dependence on imported oil and gas and did not address other important energy
security issues such as nuclear proliferation and global warming.